Going In-house with Erika Banach – Episode 40
Going In-house
EB-5 Investment through an In-house Regional Center with Erika Banach
Mona, Mark and Erika talk about investing through an in-house regional center and the advantages it brings to EB-5 investors.
Erika Banach is the Director of the Extell New York Regional Center where she is responsible for the overall organization of the regional center including managing staff members and daily operations. Erika serves as the main point of contact for investors, agents, broker-dealers, attorneys, third party consultants… and podcast interviews!
“The larger the project the more complex it is. Organization is the key!” ~ Erika Banach
What is Extell New York Regional Center?
- ENYRC was established by Extell Development Company, one of New York City’s most active real estate developers.
- ENYRC was around 25 years and was founded by Gary Barnett
- ENYRC sponsored EB-5 projects are located within the regional center’s approved geographic scope, a six county area which includes the counties of: New York (Manhattan), the Bronx, Kings (Brooklyn), Queens, Westchester and Nassau.
What is Extell New York Regional Center role as in-house regional center of Extell Development Company?
- ENYRC was formed in order to promote economic growth, improve regional productivity, create U.S. jobs, and secure financing for real estate development projects located within the geographic scope of the Regional Center.
Where ENYRC’s investors do comes from?
ENYRC benefits from EDC’s international recognition so they able to capture a lot of market investors from China, Vietnam, Turkey, Mexico and India.
What are the reasons that investing to ENYRC is an advantages to EB-5 investors?
The following are the advantages that EB-5 investors get when they chose to invest to ENYRC.
- Financial Security
Because EB-5 investors is not only the source of investment capital, funds is not limited to EB-5 investors only. EB-5 investors is positioned to the same capital stock with extremely strong financial partners.
- Strong Banking relationship
Because of strong banking relationship, Extell were able to close very large construction loans.
- Strong Equity Partners
Because of good company relationship, Extell had develop strong equity ties to pool of investors.
- Completion Guarantee
EB-5 investors are assured that projects will be completed.
- Assurance that strong financial partners are looking out for the project.
EB-5 investors are assured that they are not the only one’s funding for the project in fact strong institutions were looking out for the project also.
What are ENYRC’s major challenges of working on large scale projects?
Because Extell as a developer focuses on large scale assemblages the following are their challenges.
- Location
Ensure that the development is in a good location for accessibility.
- Market Research
The investor shall see that the market is the right market and the developer working on the project is a good one.
- Acquisition of Land/Property
It takes 10 to different 15 transactions in order to purchase different land parcels in order to create a footprint of the building.
What is the main role of the regional center to EB-5 investors?
- Regional Center handles EB-5 investor’s investment which brings a lot of comfort to them. Taking off the responsibility to them allows freedom to focus on their life planning and immigration process since moving to another country involves a lot of processes.
How do you feel about changes in the TEA legislation as it would directly affect your Regional Center?
ENYRC can handle changes in the TEA legislation because the company is confident in its ability to adapt and the diversity of projects it handles not only limited to Manhattan but to other areas and region.
What are the tasks involved in operating a regional center?
The following are the typical tasks involved in operating a regional center.
- Organizational Workflow
An organization’s workflow is comprised of the set of processes it needs to accomplish, the set of people or other resources available to perform regional center’s processes, and the interactions among them. The competent and great staff is the key to operational control of the regional center.
- Investors Update
It’s imperative that you build and nurture a relationship with them, and a key part of that is sending regular investor updates on company performance.
- Update Offering Documents
The need to update offering documents which states the objectives, risks, and terms of an investment, company’s financial statements, management biographies, with a detailed description of the business operations and more is necessary because it serves to provide investors with information on the investment.
- Answering Investor Queries
Thisinvolvese the task of answering all investor’s questions for possible investment pitch.
- Sourcing other potential EB-5 Projects
Sourcing and doing market research on possible potential projects is important to maintain a huge pipeline of projects coming.
Advice to those who have great projects but undecided to put on their Regional Center up or not?
- Work with a Third Party Regional Center
If you have a project that you feel very strongly about and you do not have a huge pipeline of multiple projects that are coming down the pipe, partner with somebody that has a grip as to what the international market are looking for and investors is looking for.
- Create your own Regional Center
If you are capable of maintaining a huge pipeline of projects you can create your own regional center but taking into consideration that it incur increased cost, new reforms that are coming through and increased fees to the regional centers.